College is a huge investment for students and their families. Tuition, especially for out of state and private schools, can cost in excess of $200,000 for a four-year education now, and that does not include housing, food and travel expenses. It is very important for families to discuss the cost of school up front, so there are no surprises when it comes time to make a final selection. The good news is that there are many ways to drastically reduce the out-of-pocket costs.

Here is some basic information to get you started. Terminology:

FAFSA — Free Application for Federal Student Aid;

Need-based aid — Aid given to students with proven financial need;

Merit-based aid — Aid given for scholastic- or talent-based (athletic, artistic, musical) achievement;

Scholarship — Merit or need-based aid that does not need to be repaid;

Grant — Need-based aid that does not need to be repaid;

Loan — Need-based aid that needs to be repaid; Work-Study — Need-based on-campus jobs;

Institutional Aid — Aid given directly by the college or department, which can be need- or merit-based.

The first and most important thing that all families need to do is complete the online application for the FAFSA. This is the information that all schools will use to determine your basic level of NEED. Even if you don’t think you will qualify for need-based grants or scholarships, you should complete this because you might qualify for federal loans or work study opportunities.

Because most schools practice “need blind” admissions (meaning they do not take into account that you will be applying for financial aid when making their admissions offers), there is no down side to completing the application. It opens on Oct. 1 for seniors, and even though the earlier it is completed, the better, it is not too late to complete it now. The application can be found at FAFSA.gov.

Merit-based aid is usually made in the form of scholarship, given for either exceptional academic performance, or for athletic, artistic or musical talent. Scholarships can be given by the schools themselves or by various organizations or community groups. Scholarships for academic performance are usually automatically applied for when the entrance application is submitted. (You should verify that with each individual school to which you apply.)

Non-academic scholarships will require submission of videos and coaches’ recommendations for athletic talent, presentation of portfolios for artistic talent, and auditions for musical or dramatic talent. Once a scholarship is offered, it is important to know that certain standards of performance will need to be maintained to have it renewed each year, if applicable.

Grants are another form of aid that do not require repayment. The federal government awards Pell Grants to students based on financial need (as determined by FAFSA) and the cost of attendance at one’s chosen university. This is offered to undergraduate students, and the current maximum is $6,495. You can get an additional up to $4,000 through FSEOG grants as well.

Work study can be a great way to earn extra money while at school. Schools will offer on-campus jobs to qualifying students based on demonstrated need. Jobs can vary in required hours and difficulty, but it not only can provide necessary income, it can be a fun way to meet other students and get involved. There can also be great opportunities within your field of study that can provide you with contacts for full-time work after you graduate. If you are offered work-study hours, make sure to check the school’s link to on-campus jobs and apply early.

Finally, and least appealing of the choices, are loans. The FAFSA will determine the amount of loan money you will qualify for from the federal government. But there are other sources of loans to explore before you accept the federal option. Sometimes personal loans from local banks will offer a lower interest rate, especially if it is backed by home ownership (line of credit or second mortgage). Make sure that you and your family are choosing the option that suits your own ability to repay the loan.

Many students will ultimately end up with a combination of sources of funding to make up their final financial aid packages. To position yourself best, make sure to do well in school and file your FAFSA early. Links for more information about all of this information can be found on my website.

Maryanne Hogan is an Independent College Admissions Consultant working with students on Maui. Visit her website, thecollegeauntie.com, for more information or to make an appointment.